Term of the Day: Guarantee Fees

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	INVESTOPEDIA Term Of The Day July 10, 2015 Guarantee Fees Fees charged by mortgage-backed securities (MBS) providers, such as Freddie Mac and Fannie Mae, to lenders for bundling, servicing, selling and reporting MBS to investors. The main component of the guarantee fee is charged to protect against credit-related losses in the mortgage portfolio (think of it like MBS insurance), but small sub-fees are also deducted to cover internal expenses for such services as: -Managing and administering the securitized mortgage pools -Selling the MBS to investors -Reporting to investors and the SEC -Maintaining the MBS on the open market, and selling, general and administrative expense Investopedia Explains: Commonly known in the industry as "g-fees", this small deduction (the average is 15-25 basis points in relation to the stated coupon rate) allows the... Read More Related to "Guarantee Fees" Profit From Mortgage Debt With MBS In its May 2006 edition of Research Quarterly, the Bond Market Association estimated that mortgage debt represents $6.1 trillion of.. Read More 20 Investments You Should Know Most people will find that their investment objectives change throughout their lives. Capital appreciation may be more important for the young investor... Read More Tenor Tenor is the length of time to maturity of a debt, contract or loan. It also sometimes refers to the initial length of... Read More Recently Added Definitions Fair Housing Act The Fair Housing Act (Title VIII of the Civil Rights Act of 1968) prohibits discrimination in the buying, selling, rental or financing of... Read More Transfer Risk The risk that a local currency cannot be converted into the currency that a debt is denominated in. Transfer risk, also known as conversion risk... Read More Related Definitions Coupon Fannie Mae - Federal National Mortgage Association - FNMA Servicing Fee Mortgage-Backed Security (MBS) Basis Point (BPS) Past Terms of the Day Developed Economy ZEW Economic Sentiment Radner Equilibrium Inbound Cash Flow Social Security You are currently subscribed as: mondemand.forex@blogger.com Unsubscribe | Unsubscribe From All | Manage Profile Investopedia US, A Division of IAC. Copyright © 2015, Investopedia, LLC. All Rights Reserved Follow Us: